Question

Record the following transactions for the month of August 2012 in the financial statements effects template below and record the journal entries.

Part 1:

A) Purchased $4,000 in inventory on credit.

B and C) Sold inventory purchased in (A) for $7,000 in cash. (Note: requires 2 entries)

D) Received and paid electricity bill for $800 related to August

E) Received $12,000 in cash for inventory to be delivered in September 2012.

Balance Sheet

Income Statement

Transaction

Cash

+

Noncash Assets

=

Liabilities

+

Contributed Capital

+

Earned Capital

Rev.

−

Exp.

=

Net

Asset

A)

B)

C)

D)

E)

Part 2: Record the journal entries for each transaction

Answer 1

Part-1

Balance Sheet

Income

Statement

Amount $

Transaction

Cash

+

Noncash

=

Liabilities

+

Contributed

+

Earned

Rev.

−

Exp.

=

Net Income

Assets

Capital

Capital

A)

+

4,000

=

4,000

+

+

-

=

B)

7,000

+

=

+

+

7,000

7,000

-

=

7,000

C)

+

-4,000

=

+

+

-4,000

-

4,000

=

-4,000

D)

-800

+

=

+

+

-800

-

800

=

-800

E)

12,000

+

=

12,000

+

+

-

=

Part-2	S.No.	Account Titles	Debit $	Credit $
	A.)	Inventory	4,000
		Accounts Payable		4,000
	B.)	Cash	7,000
		Sales Revenue		7,000
	C.)	Cost of Goods Sold	4,000
		Inventory		4,000
	D.)	Electricity Expense	800
		Cash		800
	E.)	Cash	12,000
		Unearned Revenue		12,000